Banking and insurance group SNS Reaal fully taken over by the government at cost of $5bn, finance minister announces.

The Netherlands has nationalised banking and insurance group SNS Reaal at a cost of 3.7bn euros ($5bn), Finance Minister Jeroen Dijsselbloem said, marking a rescue to avert a threat to the Dutch financial system.

"Today, SNS Reaal has been fully taken over by the Dutch state. I have nationalised SNS Reaal," Dijsselbloem told a press conference on Friday, after a deadline expired to find a solution for the distressed bank.

"With the Dutch Central Bank's deadline passing last night and without finding a solution there was an immediate and dangerous situation for financial stability," Dijsselbloem said.

"I had to conclude that nationalisation was inevitable."

The bank is the fourth-biggest in the Netherlands, and the finance ministry said in a statement that savings deposited there were safe.

The bank "came into acute need because of problems with its property portfolio," it said.

The Netherlands is a member of the eurozone, and the minister has just been appointed head of the Eurogroup of eurozone finance ministers.

'Too big to fail'

SNS Reaal is considered a systemically important bank, meaning it is too important to be allowed to go bankrupt.

"I can fully understand people's resistance in the fact that once again a large amount of money is needed to save a bank - and especially now that when we are going through a financially difficult time," Dijsselbloem said.

Shares in SNS Reaal have plunged in recent days amid speculation that the government would nationalise the bank.

Dijsselbloem said the $5bn would consist of a $3bn capital injection, $1bn to write off previous state support and $950m to isolate the bank's problematic property portfolio.

"The state will also supply 1.1bn euros [$1.5bn] in bridging credit and 5.0bn euros [$6.8bn] in guarantees," Dijsselbloem said.

In January, the European Commission blocked a plan by three other Dutch banking giants, ABN Amro, ING and Rabobank to help SNS with a capital investment, on competition grounds saying that ABN and ING had themselves previously received state aid.